Preventing Undue Discrimination and Preference in Transmission Service, 122807 FERC, RM05-17-001

Docket Nº:RM05-17-001, RM05-25-002, RM05-25-001, RM05-25-002
Party Name:Preventing Undue Discrimination and Preference in Transmission Service 18 CFR Part 37
Judge Panel:Nathaniel J. Davis, Sr., Deputy Secretary.
Case Date:December 28, 2007
Court:Federal Energy Regulatory Commission
 
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121 FERC ¶ 61, 297

Preventing Undue Discrimination and Preference in Transmission Service

Nos. RM05-17-001, RM05-25-002, RM05-25-001, RM05-25-002

18 CFR Part 37

United States of America, Federal Energy Regulatory Commission

December 28, 2007

Order No. 890-A

AGENCY: Federal Energy Regulatory Commission.

ACTION: Order on Rehearing and Clarification

SUMMARY: The Federal Energy Regulatory Commission affirms its basic determinations in Order No. 890, granting rehearing and clarification regarding certain revisions to its regulations and the pro forma open-access transmission tariff, or OATT, adopted in Order Nos. 888 and 889 to ensure that transmission services are provided on a basis that is just, reasonable, and not unduly discriminatory. The reforms affirmed in this order are designed to: (1) strengthen the pro forma OATT to ensure that it achieves its original purpose of remedying undue discrimination; (2) provide greater specificity to reduce opportunities for undue discrimination and facilitate the Commission's enforcement; and (3) increase transparency in the rules applicable to planning and use of the transmission system.

EFFECTIVE DATE: This rule will become effective [Insert_Date 60 days after publication in the FEDERAL REGISTER]

FOR FURTHER INFORMATION CONTACT:

W. Mason Emnett (Legal Information)

Office of the General Counsel – Energy Markets

Federal Energy Regulatory Commission

888 First Street, N.E.

Washington, D.C. 20426

(202) 502-6540

Daniel Hedberg (Technical Information)

Office of Energy Market Regulation

Federal Energy Regulatory Commission

888 First Street, N.E.

Washington, D.C. 20426

(202) 502-6243

Tony Ingram (Technical Information)

Office of Energy Market Regulation

888 First Street, N.E.

Washington, D.C. 20426

(202) 502-8938

SUPPLEMENTARY INFORMATION:

TABLE OF CONTENTS

Paragraph Numbers

I. INTRODUCTION ................................................................................................................... 1.

II. NEED FOR AND APPLICABILITY OF ORDER NO. 888 .....................................................7.

A. The Need for Reform ................................................................................................................ 7.

B. Core Elements of Order No. 888 that are Retained ................................................................... 17.

C. Scope and Applicability of Order No. 890 ................................................................................ 25.

III. REFORMS OF THE OATT ................................................................................................... 39.

A. Consistency and Transparency of ATC Calculations ................................................................... 39.

B. Coordinated, Open, and Transparent Planning ............................................................................ 153.

C. Transmission Pricing ................................................................................................................... 265.

1. Energy and Generation Imbalances ............................................................................................ 265.

2. Credits for Network Customers ................................................................................................ 334.

3. Capacity Reassignment .............................................................................................................. 374.

4. "Operational" Penalties .............................................................................................................. 434.

5. "Higher of" Pricing Policy ........................................................................................................... 487.

6. Other Ancillary Services ............................................................................................................. 494.

D. Non-Rate Terms and Conditions ................................................................................................... 507.

1. Modifications to Long Term Firm Point-to-Point Service .............................................................. 507.

2. Rollover Rights ............................................................................................................................. 632.

3. Modification of Receipt or Delivery Points ..................................................................................... 697.

4. Acquisition of Transmission Service ............................................................................................... 709.

5. Designation of Network Resources ................................................................................................ 821.

6. Clarifications Related to Network Service ...................................................................................... 952.

7. Transmission Curtailments .............................................................................................................. 973.

8. Standardization of Rules and Practices ............................................................................................ 979.

9. OATT Definitions ............................................................................................................................ 998.

E. Enforcement ..................................................................................................................................... 1025.

IV. INFORMATION COLLECTION STATEMENT ......................................................................... 1044.

V. DOCUMENT AVAILABILITY ..................................................................................................... 1045.

VI. EFFECTIVE DATE AND CONGRESSIONAL NOTIFICATION ............................................... 1048.

APPENDIX A: Petitioner Acronyms

APPENDIX B: Post-Technical Conference Commenter Acronyms

APPENDIX C: Pro Forma Open Access Transmission Tariff

ORDER ON REHEARING AND CLARIFICATION

I. Introduction

1. On February 16, 2007, the Commission issued Order No. 890, 1addressing and remedying opportunities for undue discrimination under the pro forma Open Access Transmission Tariff (OATT) adopted in Order No. 888.2The pro forma OATT was intended to foster greater competition in wholesale power markets by reducing barriers to entry in the provision of transmission service. In the ten years since Order No. 888, however, flaws in the pro forma OATT undermined its ability to realize the core objective of remedying undue discrimination. The Commission acted in Order No. 890 to correct these flaws by reforming the terms and conditions of the pro forma OATT in several critical areas, including the calculation of available transfer capability (ATC), the planning of transmission facilities, and the conditions of services offered by each transmission provider.

2. Many have expressed support of the Commission’s reforms. Greater specificity regarding the transmission provider’s obligations under its OATT will reduce opportunities for the exercise of undue discrimination, make undue discrimination easier to detect, and facilitate the Commission’s enforcement of the tariff. Greater transparency in the rules applicable to the planning and use of the transmission system will help both transmission providers and customers comply with applicable tariff requirements. Although we grant rehearing and clarification below to address certain implementation issues raised by petitioners, we leave in place the fundamental reforms adopted in Order No. 890.

3. At the outset, we note that work is well underway to develop consistent practices governing the calculation of ATC, in coordination with the North American Electric Reliability Corporation (NERC) and the North American Energy Standards Board (NAESB). Eliminating the broad discretion that transmission providers currently have in calculating ATC will increase nondiscriminatory access to the grid and ensure that customers are treated fairly in seeking alternative power supplies. We commend transmission providers for the substantial resources they have dedicated to this process and NERC and NAESB for their leadership in guiding the standardization effort.

4. We also commend transmission providers for the substantial resources dedicated to the development of transmission planning processes in response to Order No. 890. Transmission providers and stakeholders recently submitted tariff proposals that will govern transmission planning under the pro forma OATT. Transmission planning is critical because it is the means by which customers consider and access new sources of energy and have an opportunity to explore the feasibility of non-transmission alternatives. It is therefore vital for each transmission provider to open its transmission planning process to customers, coordinate with customers regarding future system plans, and share necessary planning information with customers.

5. In addition, transmission providers have implemented new service options for long-term firm point-to-point customers and adopted modifications to other services. Instead of denying a long-term request for point-to-point service because as little as one hour of service is unavailable, transmission providers must now consider their ability to offer a modified form of planning redispatch or a new conditional firm option to accommodate the request. This increases opportunities to efficiently utilize transmission by eliminating artificial barriers to use of the grid. Charges for...

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